Home builders hopeful for better year

When new construction slowed, some contractors focus on renovations

March 18, 2012

Local home builders hope they will be building more new homes in 2012.

According to the U.S. Commerce Department, nationwide production of new single-family homes and apartments increased 1.5 percent to a seasonally adjusted annual rate of nearly 700,000 units in January. It marked the second best pace of overall housing production since October 2008.

Jim Brown, president of J.R. Brown Construction Inc., Hollidaysburg, said he talked to a lot of interested people at the recent Blair County Home and Garden Show.

Article Photos

Mirror photo by Patrick WaksmunskiElectrician Brian Long, owner of B.L. Long Electrical Contracting of Hollidaysburg, runs wiring on March 9 at the Hunt Club Apartments in Holliday Hills.

Mirror photo by Patrick WaksmunskiCarpenter Daniel Fisher of KSB Construction of Bellefonte frames a wall for a unit at the Hunt Club Apartments in Holliday Hills on March 9.

"I do believe there is more interest in new homes. I've seen more interest in probably the last three years. I have had discussions with close to eight people about building a new home," Brown said. "People are looking at the interest rates and are more willing to step forward."

"We are seeing more activity from people looking. I would say I expect to be a little busier this year," Crossman said. "Low interest rates have a lot of people thinking about doing things."

After a slow year in 2011 when he only built two new homes, Greg Dempsie, owner of Greg Dempsie Custom Homes of Altoona, is hoping for a better year.

"We have had some calls, but I don't see a real big jump. We may have a few more people than last year. We are talking to three or four people, but it definitely is still fairly slow," Dempsie said.

Some builders were able to keep busy, in some cases by diversifying,

Mark Metz, president and owner of Metz Builders Inc., Duncansville, said he never saw much of a slowdown.

"I have about the same amount of activity, maybe a little more. I've been fortunate," Metz said. "I have not seen a decline; I have had steady business as usual. I hope to continue that trend."

Drew Swope, president of Keystone Custom Homes and Development Inc., Hollidaysburg, said he expects to see a modest increase but nothing dramatic in new home construction. He said he built townhouses and apartment buildings.

Swope said he built eight townhouse units in the middle of last year on Holiday Hills Drive and they were sold by the end of the year.

"We had a decent housing year. We've diversified into apartment buildings. That is tremendous right now. We've had some good projects in both the multi-unit and the apartment side. We have a $4 million project in the Duncansville area pending approvals," Swope said. "The key is being diversified. I believe we will see a modest increase, but it will not go crazy."

Aaron Cowder, assistant manager and construction consultant for Fine Line Homes, which has offices in State College, Harrisburg, Winfield, Hazleton and Sayre, said he is seeing more traffic, but like Swope, said there is a demand for multi-housing units.

"We expect to do about the same as last year. We are seeing more traffic. We had a good January with deposits at all of our locations, better than last year," said Cowder, whose company built 46 new homes in 2011. "The market has been swinging toward townhouses."

Andy Spangler, manager at 84 Lumber, Cresson, whose store provides building materials for several area contractors, said he has been busy.

"It could be a better year. It is way too early to tell. It may because of the weather, but the first quarter is already looking positive," Spangler said. "There has been a lot of estimating going on for new homes, decks and garages. Homeowners may be feeling loose with their cash this year."

When new home construction slowed down, some contractors put more of a focus on additions and renovation work.

"Our additions and renovations helped us survive. Our business dropped from 75 percent new construction to 65 to 70 percent additions and renovations over last three or four years," said Crossman, whose business rebounded to build 15 new homes in 2011. "We are busy. Renovations and additions weren't the worst life for us. It would have been terrible if we didn't have that work."

Lot prices have dropped, which is conducive to new construction.

"Some lots are going down. What we are seeing is that some developers need cash flow so they are selling. There also are more developments opening up to other builders that were exclusive before," Cowder said. "We've seen prices in some developments go down, especially those that just have a few lots left."

Material costs are a big concern for builders.

"Lumber prices are up. Some people have been waiting for a drop in the market and that didn't happen. Lumber prices are probably up between 6 and 10 percent depending on the item," Spangler said. "We are hearing shingle prices will go up 8 percent the first of April."

"We are concerned about the price of materials but interest rates are down, that is positive and they are likely to stay down until 2014. The feds are not adjusting the prime rate," Cowder said.